Hey, guys. Welcome to Elektronik. Dance money. You’re number one business resource for making money as Elektronik. Musicians and producers give you fun episode? Yeah, What’s up? Okay, So you guys, this is, um we’re

gonna be talking

about personal finance today and why it’s important to producers. I think this is a subject that isn’t really talked about a lot, regardless of whether or not you’re a business owner or a producer And schools don’t talk about personal finance and you get roped into credit cards when you’re 18. And next thing you know, you’re $10,000 in debt and you’re not even out of college and you have $100,000 college degree and you’re seeing there wondering. Well, what do I do now? So since you guys want to be producers, entrepreneurs ultimately and we’ve talked about how you know if you’re going to be a producer, you’re you own a business. I mean, there’s no way there’s no escaping it. If you’re listening this podcast, I mean most of you. Whether you want to be touring artists or not, you want to be full time with music, and that involves running business. So the only way to really have a successful business is to know how to manage your money. Well, personally, your personal finances. Because, um, I think we were discussing this yesterday that if you don’t manage your money, well, that bleeds over into your business finances, and you’re not gonna manage your business finances. You’re gonna basically mirror what you do personally and

habits their habits. So if you build bad personal habits, you’re gonna have bad business habits.

Exactly. Yeah. So that pretty little voice over there is actually my girlfriend Marty. And she is tthe e personal finance queen. Really? The finance queen in the house? Ah, she knows her stuff. So, Marty view on a kind of talk about your history with finances, kind of how you got into this world. And I mean, she’s not, you know, she’s not involved in the music industry, per se. She does listen to electronic music, but she’s kind of been talking to me for months now about doing a person flying in September. I’ve been pushed putting it off because I have been needing an expert and I didn’t realize Well, no, I didn’t think that I have a personal expert or on. Except that was with me every single day. So

you just wanted to music? Yeah. Is someone in the music industry to talk about it, But it doesn’t necessarily like personal finances. Personal finance. It doesn’t really matter what industry you’re in. They’re your personal finances and how you manage your personal finances in the short term will bleed over. And how you exactly built will bleed over into how you manage your business finances. As you dress said, everybody has to have some kind of baseline, and eventually you’ll probably have to hire someone to take it over for you as your business grows. But in the beginning, it’s not gonna make sense to pay someone to manage little to no business income. Because, let’s be honest, as you start, you’re not gonna have a lot of business income,

right? We’ll know a lot of the time to with producers. Um, you know, once they get to that stage where they can’t really, someone else needs to manage their finances. I mean, at that point, you’re you’re pretty successful, and usually at that time you have like a manager and a lot of the times the manager has an accountant that will help deal with those things or you’ll have, ah, music lawyer that has an accountant that they hook you up with who handles your finances through your business. And then there, you know, usually cutting you a check saying, OK, this is what you’ve made Here is your cheque or whatever, but anyways, yes. So what is your what’s your history with finances? Because I think this is the key thing for why you’re the one in this room talking about this because, you know, I have I pretty much what I’ve learned. I learned from you and some other things.

So, um, it’s kind of happenstance my getting into the finance world, I don’t have a degree in finance and every thought finance was something I was ever going to be in my degrees, actually in pastry. I moved to Austin to get into event planning, and when that didn’t work out, I was just kind of in the hospitality industry nanny ing, you know, random part time jobs here and there, just kind of to pay the bills. And then I became friends with a guy who was an intern with Northwestern Mutual, and there were two advisors there that were heavily involved in intern program. They were both interns. They’re themselves. And so they helped out a lot with the interns and they were looking for a part time assistant kind of someone to help out with servicing existing clients, that kind of a thing. So I was like, Why not? You know, it’s a little bit more of a stable thing, you know? It doesn’t necessarily have to be permanent. It could be a part time temporary thing. Well, I kind of get this event planning thing that I really actually wanted to do at the time, kind of more lined up. And they they were well aware of that. And they were like, Yeah, this is kind of part time thing. We don’t even know if it’s gonna work out. And it just kind of clicked. I clicked really well with them. They clicked really well with me. All of the kind of knowledge I was getting from just trainings that I was doing to get more licensing and be more effective as an assistant to them and move up in my rule. It all just like, clicked and made sense to me. And so that’s kind of my quick background is is again, no college degree, just kind of trainings through my job and learning from them who they both have finance degrees or sort of certifications in that kind of a thing. They’re they’re more knowledgeable than I am. But I have the basics down pat. That’s

sure, right. Well, I mean, you basically run that office. Marty, her cellphone, say that she’s, ah, personal finance expert. But I will. I would definitely put her in that category, especially because she’s been at it for years now and everyone wants a piece of you. So and for those of you who don’t know what Northwestern Mutual is, Northwestern Mutual. They deal with a lot of basically finances. You meet with financial advisors who help you set up emergency fund savings, help you out with retirement funds, a CZ well selling life insurance. So it’s kind of the full package of if you’re struggling with finances, that’s their kind of the go to people where they will set you up with goals, put you on a road map to get you to success so you can retire at 60 65

40 If you want, you know it. And and there Northwestern Mutual does full financial planning. So, like holistic planning, whether that’s organizing your budget, getting life insurance, you know, hooking you up with a new attorney or a c p A. That like they have resource, is for all of those kinds of things. So, um, that’s that’s what I help with. I’m not technically employed by Northwestern Mutual on. None of this is, you know, backed by Northwestern Mutual. You know, this is all kind of my personal knowledge and and what I’ve learned from my experiences, but they are a great resource. If you’re needing someone to talk to you, there are a bunch of other companies out there that can help you with this. You can do kind of the first steps on your own as well. But if you need someone to hold you accountable like it doesn’t hurt to find some free advice,

that’s the thing, too. I think that might. That’s probably going to be a big part of this at episodes, the accountability factor of personal finance, and this is something that it’s It’s probably the one thing that people struggle with the most, is they? I’m sure a lot of you guys that are listening today who might be struggling with your personal finances. You are in a position where you’re like, I know I need to be better with money, but you’re kind of like how do I one you’re thinking? How do I get there and to how do I stay on track? And that is probably the most difficult thing is, Ah, but But that’s the most important thing is making sure that you’re sticking to your plan and sticking to your budget. Because once you’re sticking to those kinds of things, ah, life gets so much easier, so much less stressful when you have some savings built up. So you know, if anything goes wrong, you’re okay. And you know the current world situation. This is one of the primary reasons why I wanted to do this episode is because you see so many people currently being laid off and their first go to movies. Well, what’s the government going to do for me? Toe fix this situation Well, if you have your finances in order and you have savings built up, you don’t have to look to that route and you don’t have to be a stressed out as a majority of the people are who are thinking, Well, how am I gonna pay rent? That’s why you have savings built up in an emergency fund and you continue to grow that and you have other assets as well that you can put money into that can help with that. You know, you can kind of lean on those kinds of things when you’re in desperate times. Granted, it’s always best to pay straight out cash, but, you know, sometimes you might need to dip into a credit card. Thio pay something for an emergency. But again, it was an emergency things which we’re going to get into. You know, one of the things I was taught I was talking to some friends about It was just last week when everyone, you know, everything kind of hit hard. Over the past couple weeks in the US with Corona virus. They were talking about one of my buddies whose who works in a pretty well known company in the U. S. They’re doing major layoffs, and he barely missed it. But then today, apparently he actually did get laid off. So it’s really tough situation. And they were talking about the stimulus bill that’s coming and getting unemployment last week and I was saying there I was like, Well, you guys, this is the reason why you should have savings and they’re kind of being there. Well, why don’t have the money to buy saving or to put money in savings? And I’m like, Well, I mean, we we buy video games every single week, so you have some money to put it into savings. Just you’re wanting to use that money for something else on and that for you, it might not be video games. Someone else. It’s a pair of yeezys that they’re going to spend their money on alcohol, alcohol, money, money they don’t have on items that aren’t an investment that are just going to grade in value that are gonna be worthless and assumes you buy them. They’re worthless after that.

Yeah,

so it’s It’s all about managing your money well, and they, for some reason they couldn’t. They understood what I was saying, but they I think a lot of people understand that they shouldn’t be spending money on certain things. They’re afraid to be wrong and admit when they’re wrong,

there’s no system in place. That’s the thing. You have to have a system in place because depriving yourself of everything that you love is not going to last. You can make the most strict budget where you don’t spend any money like going out. You don’t spend any money on video. You don’t spend any money on the fun things you like, and you’re not going to stick to it because it’s not realistic. You have tohave like money budgeted for those fun things, things that you want to do. But you also have to stick to that budget. Like if your budget for that week is $50 on going out to eat and you spend the $50 someone invites you out for brunch, you don’t get to go to brunch because you already spent your $50 like that’s you just kind of have to build that self accountability and build that habit, too. Stick to your budget and build your budget around the things that you like to do and your existing spending. You can’t you have to know, have an idea of what your existing weekly monthly yearly spending is and what you’re, you know, nonnegotiable. Bill’s cost versus, um, your you know, your grocery budget versus going out to eat versus alcohol versus, you know, like if you have kids, their allowance all you know, you have to build your budget around those existing things. And if you need to cut back, you cut back in the discretionary places, like going out to eat, buying video games, buying clothes, that the kind of things that you still get to live under your roof. Your family still gets to eat. You know, you cut back on those things, you don’t cut them out completely because you’re you’re you’re setting yourself up for failure. Really?

I think it was. What was it like a year ago? You have a year ago, we were kind of toying around with different finances for ourselves what we could do. And we’re like coming up with wild and crazy ideas that, in theory and on paper, seemed like a great plan like we were gonna just combine, are basically combine our money together or one of us was just gonna pay all the bills and then the other pair persons Patrick was all going to go towards debt. So we’re like, Oh, we’re gonna be old A payoff all of our debt in three or four months, this will be easy with. And we we went strict. No going out. No spending money on fun things. I

restrict grocery budget. Very think

it lasted a month.

I think we did Maybe two months like Okay,

well, well, e think it was like we Ah, the first time. We’re like, okay, we have or putting $1000 down on one of these credit cards or something, but I don’t think we even put the full amount down because I think something popped up where

we’re like,

Oh, show it. And that’s what happens naturally. Every there’s

always gonna be something that you have to

pay always something that you do not expect for that in it. I’ve been playing this this cat and mouse game for years now, where I’m like Oh, I just need to get through this next month in my I’m gonna be golden now, like I’m not gonna have to pay for that again. I’m not getting but then it’s like Oh, well, no, this is now popping up. Don’t tire. Yeah, I need todo eso There is. There is always something that’s gonna pop up, And, um so that way, it’s it’s it is unrealistic to try to do that. Like where we’re talking about where we’re trying to do this crazy budget and on, You know, in theory, it’s in great

if you’re really, really strict and really, really, really self disciplined, and you, like, really, truly can stick to something like that. It can beat like I’ve read stories of people doing it where they buy nothing that they like. They buy groceries, and that’s all. They They have the most minimal budget for a year to get out of debt, and if they’re very, very motivated and they’re very self, doesn’t like it can be done. But it’s not realistic, and the majority of people aren’t going to able to follow it right. You have to have such insane self discipline or like a very serious goal you’re working toward toe have the motivation and the ability to stick to something like that, right? Any. It has to be like you have to have a timeline for you can’t be like this is our budget until otherwise determined. You know, like all the stories I’ve read. People have done it for a year, you know, to to build savings, to pay off debt, whatever it might be. They’ve done it for one year, you know, like something like that could be done. But again, it’s really not realistic for most people. So let’s get

into budget. Yes, I think budget is It’s kind of what we’re talking about right now, and it’s probably it’s the foundation of all of this. Um what? Whether you’re wanting to build savings are have money for your business? Um, I mean, it’s just budget is everything. It’s how you’re gonna pay for your central bills. You’re not a central ones. You’re fun stuff all that. So I mean, I guess what’s step one for building a budget?

So essentially you want to reverse engineer your baseline. So you take a look at what you’re spending on a monthly basis, like print out your bank statement from the last three months and go line by line and categorize like, Okay, this is a bill. This is what we spent on groceries. You know if you buy alcohol at the grocery store or if you buy alcohol Liquor store, that’s not. Technically, alcohol is not considered part of your, like, essential spending that’s considered a discretionary expense. Um, groceries, however, our discretionary are are essential. So, you know, reverse engineer it print out the last three months of your bank statements average out what it is you’re spending on a month to month basis because every month does differ a little bit, you know, like people go to Costco once every three months. So their grocery bill in March might be twice as much as it is in, You know, most of the other months because they’ve stocked up on a bunch of household items, that kind of thing so kind of average it out that way, I’d say, is the best way to get a baseline of where you’re starting from. And then if you are trying to, you know, if you find out that you’re spending more than you’re making, you know you’re using the credit card for all the all the groceries, and you’re not necessarily paying the balance off every month, um, or, you know, whatever it might be you know, you’re spending more than you’re making. Then you need to start budgeting and cutting down on some things

that that’s a key one that I really want to talk about right here. Because that’s that’s what we did. We looked at our finances last year, and we were like, We’re spending too much fucking money. And I I think, uh, I think a big issue to that a lot of people have is as soon as they get a pay raise, which I know I have that the same issues. Well, sometimes you go. Oh, shit. I’m getting two or $300 more a month. And so what? That usually tells people in their head what they tell himself is, Oh, I can spend more money now. And so they they’re like, shit, I’m finally like, Oh, I’m fine. I’m feeling a little like this weight is lifted off my chest. I’m no longer living paycheck to paycheck, and then they start spending more, and then they max out their money and they go, What the fuck happened? Like two months ago, I had so much money now am living paycheck to paycheck again and a lot of that has to do with not being, um, strict with yourself and maintaining a correct budget instead of taking that money and putting in savings or towards something else, like paying off a credit card. So when your credit cards paid off now you’re gonna have even more money or paying off a car payment. Instead of putting that money towards that kind of thing, you start spending more. Now you have a bigger amount of like you’re spending more money that you have to keep maintaining over time, and it can feel like you just choke yourself out every time you get a little bit extra money. Ah, into sometimes you have to sacrifice things. And I think sacrificing is one of the biggest lessons that you need to learn as early as possible that, you know, you’re not always going to be able to get the biggest and nicest apartment. You’re not always gonna be able to get the next nicest car. You’re not always going to be able to get the next best piece of gear, and you shouldn’t because you should all be always. You should always be looking at how you can be more efficient. I think that’s being efficient is more important than having the next big, big thing that you think is gonna get you somewhere, cause I can tell you right now whatever nice piece of gear you’re looking at right now is not going to get you to where you need to be as a producer. What’s gonna get you there is learning, practicing and just time over time working on stuff. It’s the same with if you want a new car and you can’t really afford it. But you have a little bit of extra money you can put towards it isn’t necessary. Do you need that new fucking car or can you run your car into the ground from the next three or four years? You know,

I used car

by use.

Don’t whatever you do. Don’t buy a new car. They’d appreciate half their value in five years by a five year old car. Don’t buy a new year period, period.

Definitely. Definitely. Um but I mean, last year we looked at, um, everything and we were going to be paying somewhere close to $1500.1400 dollars a month for apartment that we originally were spending $1100 when we first moved and we’re like we were hoping to move into a house and get a bigger place because with with a yard after the dog and, UM, we looked at our finances, we looked at what we could afford and we looked at houses in the area and we’re like, It’s just we can’t really do it And so we end. It actually ended up having. We’re thinking okay, we’re in this two bedroom apartment. We need to move to a one bedroom. That’s just kind of what we have to do to save some more money, so we can. I mean, we’re both making more than we were at that time, and we got a cheaper place. So now we do have more money in our pocket that we can put towards other things, whether that’s us wanting to go out or now it’s savings. All that money that we were spending before, that’s all been going in our savings account and putting a little bit of extra money towards our debt.

And now if you still have a job with all this Corona virus stuff, you’re not going out you’re staying home. So all that money that you’d be spending on going out food and drinks and all that kind of stuff put that shit in saving us,

building your savings down because you don’t know

a little goes a long way to like if you start saving just $10 a month like if that’s literally all you can afford, you look, you reverse your budget and based on how much you make and your essentials literally all you can save his $10 a month save the $10 a month. Make it a habit to save $10 a month every single month. And you know what? In a year you’ll have 100 bucks you never know. Like if if that is how strict your finances right now, $100 could do you a lot. That’s Ah, cushion. If something happens in an emergency, Ah, $100 can get you a lot. You know if if you have to by an extra round of groceries, if you were $50 short on you know it, just having a little the tiniest cushion seriously relieves so much stress for little situations like that. And obviously If you have like a major car issue, that’s not going to solve it. But you’re building that habit. That’s what it’s about. It’s about building the habit of saving on a monthly or bi monthly, whatever it might be basis and saving a consistent amount

in woman. The next time, too, is like, let’s say you do have a day job in an office right now when your review comes around and you do get paid more. In the over the past year, you’ve been saving that $10 a month and building the abbot. Now you’re used to doing that. Now you can go. Let me save an additional 20 on top of that tense areas, saving $30 a month in your savings. So you’re gonna triple what you were saving last year. So the next year around you’ll have somewhere close to $400 then, if you can add in another double it again, go to $30 there. Now you’re saving $60 a month. You’re starting to build something that’s actually worthwhile, and to the point where you can start pushing yourself now. I will say, if you take a look at your finances and you can Onley save $10 a month. Then I think it’s important to look at what can you sacrifice? Because again, this that plays in

tow. Yeah, that’s kind of what I mean by though with, if you can truly only spend or save $10 like if your budget is the bare minimum, if you’re spending, you know you have a $20 a month fund budget, you know, for whatever it might be

going on TV or something,

you know? Yeah. Ah, lunch. Occasionally you forget to bring lunch to work, that kind of a thing. You know, if if that’s all of your fund budget like I’m not saying, get rid of your fund budget. I’m saying Take $10 of your fund budget. Your your fund budget should not be more than your savings budget. Definitely it should not be, Um, and that’s kind of like the number two key of building a budget is your You should be saving 10 to 20% of your income on a monthly basis if possible. Obviously, you know, like if again, if you’re in that bare bone situation, that’s not gonna be possible. But if you’re looking at it and you have quite a few discretionary expenses that you can cut back on, and if their discretionary you can cut back on them, that’s why they’re called discretionary, you should be saving 10% minimum minimum 10% of every single paycheck that you get 10% and set it up. Like most banks, you can set it up. As a rule, you can automate so that 10% of any deposit over a certain amount gets put in your savings account. You know you can. Most banks now have the like, round up feature, so every transaction, every debit card transaction you do gets rounded up to save the change. All of those things are they’re very helpful tools. And just because it’s being put in savings doesn’t necessarily mean that like, Oh, shit, I save too much. Now I can’t pay rent doesn’t like that doesn’t mean that you shouldn’t pull out of there to pay your rent. But you shouldn’t be pulling out of there to go to brunch or to go, you know, to buy concert tickets or, you know, to go to the bar. That’s not what that savings is for that savings is for if you saved too much based on your budget and now you need to pay a bill that kind of a thing. But again, minimum 10% of your income should be savings. And your discretionary expenses should not be more than what you’re saving.

I will say we do have, ah, spreadsheet that we’ve made that you can go download. Um, if you go to envy side of your dot com slash budget and that will actually be a full spread, she of all of your items, you can basically enter. And it will give you calculations on what your total budget is whether you’re spending too much compared to how much you’re actually making and so you can take a good hard look at everything on a nice, well thought out. Spread she and determine. Okay, what can I cut back on or oh, I you know, something you mentioned? Would you look back when you’re making your budget initially and you look back on your three months of statements, you can. You’ll be surprised you’ll take a good hard look because it’s it’s difficult to see what you’re actually spending money on when you’re just swiping that card and you don’t have any cash. But as soon as you start looking through things, you can’t get a good hard look in the mirror and go, Oh, yeah, I’m not really spending money on things that I should be spending my money on. So, um, uh, that budget, the spreadsheet will also allow you to take a good hard look at what you’re actually spending your money on. And don’t cheat yourself on that budget. That’s probably the worst thing you could do is cheat yourself just to make yourself feel better, cause you’re not doing yourself any favors at all. You’re always going to be stuck in the same situation. You’re always gonna be complaining and wondering why you have no my money, and then you’ll just try to find the blame and point it somewhere else. Like it’s your employer. You’re not getting paid enough for whatever, but and I think that is a big issue with a lot of, um, the younger generation, the millennials and the gens eases. They’re always complaining about how they’re not making enough money when in fact I think the answers or the question should be pointing out. Well, what am I doing for my own personal finances? I don’t think they take a look. It what They’re spending their money on, how they’re spending it and what they’re saving money on. Ah, and if you can be accountable and you could be mature about it and you can actually look at that, you’re already 10 steps ahead of the person to your left and you’re gonna be 1000% more successful. And I think that’s the whole point of this is because something you mentioned was I think it was It was in the article that actually just got released the other day that you help me, right? So if you guys want to go check that out, you can go to envious audio dot com slash 17 ways, and it’s gonna have a lot of the things we talk about in this podcast episode. But, Marty, you’re you wrote that one because I mean, that was that was one I wouldn’t hurt attack on. But she mentions it right at the beginning of the ardor article in the first couple of paragraphs, that who who do you know that successful that doesn’t have a budget or or good personal finance. No. One. It’s a big fucking goose egg. There’s not a single person that is not remotely sexy, successful. That does not also have good personal finance because the two go together. If you wanna have lots of money and you want to have nice things you had, you’ll have savings. I I think that’s like that is the answer is having savings, because as soon as you have money saved up for emergency situations, when your car breaks down, you have to spend 500 or $1000 on your car. If you don’t have that savings built up, you now have to dip into your fund money. And although all the money that you want if you want to go out to eat, if you want to go get drink, that’s the money you’re gonna dip into, and that’s when you’re gonna be upset. When you can’t go do those things, you can’t leave the house now. Grand right now is a different situation,

but four or that’s going to cause more bad habits, because if you have to dip into that money and then you want to go out and you don’t have the self discipline to say no, I can’t go out because I had to spend my fund money on repairing my car. You’re gonna go use your credit card, swipe the credit card because it’s money that you don’t have but you have access to. And then you’re gonna get yourself in a hole of debt that you can’t get out of because you don’t have the budget for it,

right? Yeah, it’s the I think savings is the I cannot believe that this is not something talked about in school. I mean, it is a disgrace. It’s an embarrassment that these are not things that are talked about in school. And it’s probably the most important thing out of anything you will learn in school because this is your life we’re talking about. This is the rest of your life. And if you’re not taught successful habits and things that are gonna make you successful and make sure you live, you’re gonna be fucked until you find an answer. And you might be wandering around for decades until you’re 40 and then you go, Oh, let me pick up this personal finance book because my finances and never been good and let me

see what you want about, you know, like there’s there’s events in your life that make you take a look at it. And until you hit one of those events, like getting married, having a kid buying a house, whatever it might be, um, if you have no knowledge, that’s not that’s gonna be the time that you first take a look at it. And if you take a look at it and you have no idea what you’re doing, that when you’re 35 getting ready to have a baby and about to buy a house, guess what? You’re not gonna be able to buy a house because your credit score is probably shit. If you’ve never looked at it, if you if you’ve never looked at your finances, if you’ve never had a budget, if you’ve never looked at your credit score, you’re not going to be able to do those things, period.

Yeah, it’s going to be stressful. You’re gonna

have a tough pill to swallow at that point in life,

and you’re gonna be very unhappy. And buying a house in that situation is not gonna make you happy at all. It’s gonna make things worse. It’s gonna make you be very unhappy. And if you’re to that point, if you’re 35 right now, getting ready to have a kid and you want to buy a house and you’re listening to this broadcast right now and you’re starting to realize that that might be you, that’s a shitty It’s a shitty position to be in, but it’s It’s a good thing that you are trying to do something about it, especially if you’re a musician and listening to this. Um, but like we’re talking about about making sacrifices, unfortunately, that might be a sacrifice you need to take for five years if you take. If you If you decide to dig yourself into a hole and buy that house, the house might get foreclosed on in five years, and Yuma now might have to file bankruptcy. Then you’re in the hole again for another seven years where you can’t do anything. Now you’ve extended for where you could be financially successful in five years and by the house you want just might need to sacrifice some things for the time being. Well, now you’re fucked for 15 years before you can even remotely build things back up to where

you started from 35

where you started from. So that means you have to wait another five years after that. Before you’re

in the

position, you could be. So now you’re 55 you can finally do the things you want to do. That’s 20 fucking years. That is way too long to be waiting for the things that you want to do. All because of one bad decision you made that you could have, not you. You could have made the right decision. Waited five years. So that’s why these things are so important. These things we’re talking about today are so important to learn when you’re young and you have so much time and you can work on these things and you can get yourself into a good position. So when you’re 35 you’re going to be sick. You’re already successful if you’ve already been doing all these things, if you’re getting married and hopefully by that hopefully the person you’re marrying is also in the same financial position is you. But you’ll have that $10,000 saved up in your savings. You’ll have the three months you need. If you get fired, you’ll have life insurance. You’ll have different things that you will help you along your way. So you’re set up? Yeah. So did you say something?

Well, I just think like in general, people don’t talk about money. Like my parents never talked about money.

Neither did mine.

I know. Like I know they have credit card debt. I know. You know, we went on a lot of awesome vacations when I kid when I when I was a kid. I have an idea of how much my parents make, but like we did not talk about money at all, my parents opened banking. Help me but open bank accounts when I got a job, that kind of thing. So I like my mom worked in the bank. So, like, I had an idea about how bank accounts worked. But I had no education on credit cards. I had no, you know, baseline for what you’re supposed to do with money. You know, um and I think it’s another thing that, like, either number one couples, you know, just people in general don’t talk about money enough to make it like a normal conversation topic. And I feel like you and I, Christian, um, kind of opened up to each other about what our finances were like very early in our relationship. And so money has never really been like a stressful or like an argumentative topic. It’s just it is what it is, and we’re both very like, aware of what the other person’s financial like. We don’t have combined finances at this point, obviously, but we both have an idea of where the other person’s finances are, what their budget is on certain things. You know, we talk about it on a regular basis, and I feel like that’s kind of one of those things that it, it means to be talked about more and be become more of a regular topic to talk about in couples among friends, that kind of a thing, because you can learn a lot from just having a simple conversation with someone you don’t even need to bring, like exact dollar amounts into it. If that is what makes you uncomfortable about it, like you can go talk to your best friend and say, Hey, what is your budget look like, like in percentages. You know, you don’t necessarily have to bring the dollar amounts into it or anything like that. But just having conversations like that with people that you trust or you feel might know a little more than you, it doesn’t hurt.

I think, um, as producers as well, you know, we talked about running a business is kind of, you know, personal. Your personal finances are going to run into your business as well, so it’s also important if you do have a significant other. Don’t be making any risky business decisions without talking to them first, because you’re not when you’re with a partner, you’re not, and you own your own business. Yes, it is your business. Yes, you own your own business, but you, the way you managed the money of your business and especially if your family is dependent on that money. Your partner also kind of has a say in what you’re doing with that money. Because if you’re making risky business decisions without talking to your partner first and they don’t turn out the way you think they’re going to, you’re gonna have serious issues you’re gonna That’s when money becomes an issue A soon as you start fighting about money, it’s a really rocky and rough road. It opens up a lot of wounds that are tough to put away. Um, and it’s hard to let those things go, especially if you do have a kid, Um, or if you’re trying to buy a house, you wanting to get married? Ah, it is your business, and you do. You do technically have the right to do whatever you want with it. But is it smart to not include your partner and some of the financial decisions that you’re gonna make? But I mean, let’s say that you have money in your business saved up to where you can spend $1000 start going to really affect anything. You might be $1000 in the hole for the savings in your business account, but that doesn’t mean you’re gonna have to shut your doors next month or you can’t put food on the table. Those are different business decisions that you’re able to make yourself that you don’t really need to include someone on. But if this means spending all the money in your savings account, or your business savings account or spending all the money in your business checking account. That’s a serious thing that you’re going to need to. You’ll want it. You’re gonna want a second opinion on. You’re gonna want to talk about it if it’s the right move to make and you’re you’re able to make it, cause if your partner can say, Oh, I’ve got plenty of money saved up in case something happens. Yes, you’re OK with doing that? Then you’re on the same. You’re on the same page. It’s okay. You’ll feel much more comfortable doing it. And especially if it doesn’t go the right way, you won’t feel as bad, and you won’t create as much of a rift in your relationship. Ah, so we’ve been talking a lot about budget. Um, what’s the second kind of second tier two? Improving your personal finances? Obviously. You know, we talked about budget for a long time, but it’s the foundation. It’s what everything is built upon. Uh, what’s the next thing after they get a budget set up? What should they be looking at that point?

Yes. So, um, budget number one too, taking Ah, holistic. Look at all of your debt. Whatever. Debt. A car payment, mortgage, credit cards, a student loan. Ah, whole list taking. Ah, holistic. Look at all of it together, Um, and kind of figuring out where you’re at, um, pulling a credit score. Do you have any idea what your credit score is If you don’t go look now, like pause this and go Look, you can get one free every single year from all three credit bureaus.

That’s experience if you’re in the U. S. I think or is that just in the U.

S? Yeah, just

just in the U. S. You can go to experience Trans Union and Equifax. Um, if you’re in a different country, you’re gonna have to kind of look up where you can find out what you if you even have they have credit scores.

Yeah, I don’t I don’t know internationally what that looks like. I’m not either. In the U. S. You can get one free credit score from all three credit bureaus for free once a year. You can also create like a free Experian account. I’m not sure about the other ones, Um, and just kind of monitor that way. Um it’s key to know where you’re starting what your credit score is. Do you even have a credit score?

If you were a part of the Equifax reach from a few years ago, you should be. You should be paying for service to monitor your credit score at all times, especially if you’re running a business, especially because that can royally fuck you harder than you could ever imagine. Especially if you’re wanting to buying by a car and you have to finance it or buy a house and you have to finance it. We’re getting Get a business loan. If you want to get a business loan that your credit score might be fucked because someone has taken to your credit or your Social Security number in your name and has opened up for business accounts already and taking out $100,000 in loans,

you have no idea,

no idea. So if if you don’t know if you were part of the Equifax breach, I’m pretty sure you can still look it up and find out. And if you are a part of it, you should be paying for credit monitoring service. Pay the $120 a costs a year for experience or whatever it’s worth it you get. You can check your credit score to any time they give you monthly updates. They tell you how you can improve your credit score. What’s making your what’s affecting your credit score the most? Ah, so definitely 100% be looking into that stuff

well, and then, like if you don’t have credit at all, you might not have a credit score. Um, so you know, if you don’t have a credit score and you’re wanting to buy a house or get a business loan or something like that, you’re not going to be able to. You have to have credit in order to get credit. So I know that sounds kind of like, Well, how do I start if I can’t get credit and I don’t have a credit score there? There are, like, a couple things you can have someone co sign with you like my first credit card. My mom co signed on with me. Um, or you can do like a secured Ah, a secured card, I believe, is what it’s called, um, or a credit builder car credit builder loan cards. Something like that.

That’s where you like, put

you put a deposit down. So if you put if you have $400 you put $400 down. They give you a credit card with a limit of $400 and it’s basically like a secured card. So they have the $400 that they’re giving you basically already. So if you default on it, if you don’t pay it, they’ve already made their money. Um, but you do still have to make the monthly payments on it. So it’s basically a way to build your credit to build payment history, all that kind of stuff. Um, without the bank having to take on any real risk. Um,

that’s a really good card to use, too. If you’re credit score is royally fucked because of stolen identity, and you’ve never had a credit card before anything like that, that’s a good way to build that score. Backup is to get one of those cards because if your credit scores fucked because of identity fraud, you’re not gonna be able to get a credit card anywhere else s. Oh, that’s a good card to use.

Yeah, I actually heard a statistic recently that, um, having won year with one of those cards, having one year of on time regular payments and not, you know, keeping the card maxed out her, like using the card responsibly, making the payments. If you have a good one year of history, it can raise your score by, like 35 points about, um, so if you’re you know, if you’re sitting in that like 5 50 range and you’re like, How the fuck do I get out of this? That can. That’s a start. You know, it’s it’s it’s not going to happen overnight. It’s impossible for it instantly happen. Um, but the other thing is with taking a look at your credit report. That’s how you find those things that are wrong, and you can dispute them and get them removed. It might not happen overnight. You might have to, you know, it might take some time to get them removed, but if you find like, uh, if you have a credit card and you find that your bank incorrectly reported a late payment, one late payment can knock your score down by 100 points immediately. 30 day late payment. You know, if you pay your card five days late, usually the banks aren’t going to report that on your credit. But if if you haven’t a nen correct reported like descriptor, if you have ah, um, negative mark on your credit report that is reported incorrectly. You need to go to your bank and say, Hey, this was reported incorrectly. Why was it reported this way? And can you remove it? And if they refuse and you have proof, then that’s when you submit it to the bank and say, Hey, no, it was paid on time. You need to remove it because going to the credit or going to the credit bureau is what you do. Win someone put out a loan fraudulently. Something like that. You know, that’s when you go to the credit bureau. If there’s a payment or something that is truly your card, you own that debt. Um, that’s when you need to go to the bank and get it fixed. But getting those things fixed that will increase your score dramatically right away. Um, or as soon as it officially gets removed from the report. Um, so that’s kind of the first place to start is knowing what’s on your report on getting it fixed. If it’s incorrect now, if it’s if it’s yours, you can’t go to the bank into Hey, remove this. If it truly was a 30 day late payment, it kind of sucks happen to me. You know what? A year later, and I’ve finally built it kind of back up to where? Well, I guess two years later now built it back up to where it doesn’t affect the score anymore. Um, but I’ve also had on time payments, and that’s my one and only late payment ever. Um, so that’s that’s one of those things is you really do have to maintain the on time payment timeline in order to help help it. One suggestion is eternal. Your cards on auto pay for their minimum balances,

huh? The other thing to what I did for my credit cards, because I had Ah, my My due dates were kind of all over the place so you can reach out to your banks and say, Can I get this change to this day? So I aligned all of my credit cards toe be due on the exact same day and I put the last day of the month on the 20. And I think it’s the 28th because of February February. So because if every 28 is when you can make, you can put all your cards to be due on that day. So you’re not like, Oh, shit, I have a card that’s due on the seventh of the month. I’m halfway through my paycheck. And if you sometimes that that I know that fucked me a couple times when I overspent money, I didn’t have a budget. And now I have a minimum payment. Do that. I can’t pay. And so now I’m going to get a late fee on top of yo in case I forget to pay it all together and I don’t have auto Pace it up. Now I’m gonna get knocked points for the next payment. So

Well, that’s the other thing. Is having auto pace set on just for the minimum? Maybe you’re not spending just, you know, maybe all you’re making right now is the minimum payments on your cards. But if you’re using your cards responsibly and you’re paying off the balance every month, having it on auto pay just for the minimum insurers that you’re not gonna have a late payment you should still like. Obviously, you still need to go in there and make a payment to pay off the balance every month or to pay down the balance however much you’re putting on their, Um but at least you’re safe guarding yourself from having the late payment. Um, if you have it on auto pay for the minimum balance Or, you know, if you if your budget isn’t a place to where you can have it auto pay, pay off balance every every month, do that. It really it depends on where your budget is. All of this advice is can be tweaked toe where your current situation is at avoid late payments at all costs. Turn that out of PE on.

You obviously need take a look at all of your debt. How should you be looking at what? What should you be paying off first? When can you start? Should you start doubling up on payments and have what’s that process look like?

Yes. Oh, I know. Um, Dave Ramsey is very popular in the personal finance world. And, um, there are some things I agree with him on and some things that I don’t necessarily agree with him on. Um, in terms of paying off debt. Sort of, um, obviously, if you’re trying to if you have balances on all your cards that you’re trying to pay off, start paying off. Um, the one with the lowest balance first. However, if that lowest balance is very small on your minimum payment is very small. Pay off the one with the highest interest payment first again, this all it’s all personal preference. And what motivates you in that kind of a thing? If you find that you have this $100 card that you’re making the $20 minimum payment and it’s just driving you nuts and you can pay that $100 off, pay it off. Just paid. It doesn’t matter if the interest rate is 2%

paid off. And don’t touch the car.

Hey it off. And don’t touch the card until the other cards are all paid off. Then start with the you know if if you need to see quick progress and you need to see like knocking cards down and not having as many monthly payments pay them off by the size of the balance. In terms of like, this is the smallest balance. This is has a balance of 200. This one has a balance of 600. This one has a balance of 2000. Um, if that’s what’s going to keep you motivated, do it that way. However, in terms of financially and what’s gonna be the most efficient, paying off the highest interest card first is going to be the most efficient. So if you’re going to, like, double up on payments for one card, double up on payments for the card that has the highest interest rate

in those interest rates will buck you, especially if you get those cards are like Don’t pay any a PR for two years, you know, sweet and you rack up that card over two years, and then all of a sudden your minimum payment goes. We

have a 25% a PR, and your minimum payment goes from 25 bucks a month to 65 bucks

a month. 200 happen to me. I had a card, my chase card. That was a $25 a month minimum payment for two years, Iraq that they kept. This is what they’ll do to once you start racking up your debt and you hit your ceiling, you cap out your card, they’ll go. Oh, you need a little bit more here. We’ll bump it up another 500. We’ll double it. And then you go, Oh, I have more money and they start spending because you’re in a bad habit. At this point, they know that, and so they know they can rack you for more money. It’s a little double it. Then you’ll go from 500 limit $2000 limit and you’ll cap. That will go. Oh, we’ll double it again for you and they’ll give you another $1000 you go up to 2000 and we’ll double it and they’ll keep doing that. And that’s what happened to me until I was thick. $6000 in the hole on one card, only a $25 minimum payment in the two years came up, and all of a sudden it was $185 a month for the minimum payment. My interest rate, my interest payment was like I think it was like

it’s more than half At that point,

you lie. I mean, my minimum was like $25 then my interest payment was like, 160. They’re paying interest charge on every month. So it was like just getting brutally

fun. You’re a the year at that point, then you’re so far in that you’re it’s it feels impossible to pay it off. And that’s and that’s kind of where we were at you and I when we started doing the extreme budgeting and trying to put as much money every month on on the cards as possible. Um, which obviously it didn’t last very long because we weren’t having any fun and we had no motivation to stick to it because we had nothing to look forward to doing.

Yeah, now it’s all like, almost it’s halfway paid off, like

all the

debt over two years. I think

a little under two years,

all under two years, probably another year. So in all that that’s going to be paid off. My interest payment has dropped significantly. That’s the quickest way for you to get your money back. Money you’ve been losing is paying those high interest rates.

Yep. And the other thing is, is, if your card is maxed out, it’s affecting your credit square a lot. You should never spend more than 30% of the credit line on your cart. You should never spend more than 30% of the credit line. So if the credit card limit is $1000 you should never have more than $300 on that card ever. If you have to spend $500 spend it and immediately put $200 on the card and number two. You should absolutely, absolutely never roll over a balance month to month over 30% of the card.

You never Can you explain that a little bit more with that.

So the responsible way to use a credit card. And I know a lot of people like to use credit cards for the points. You can get free flights. You know they’re great if you use them correctly, and by using them correctly, that means paying off the balance in full every single month. So if you’re already in a bad habit of just putting everything on the credit card and not paying it all off, paying just the minimum payment. Don’t use the credit card period because you’re not gonna use it responsibly. You’re gonna put yourself right back where you started. You have to slowly build the habit back. Reform your habits. Two Onley spending what you can pay off on a month to month basis.

It takes 60

six days to build form a new habit. So I’ve heard that. And then I’ve also heard that that’s not exactly true. It’s different for every person and and depending on how consistent you are,

just looks

like averages about 60 days. So, like two months or so.

So if you can get yourself in a good habit for two months of putting savings down, um, paying off whatever your monthly balances for your card, get into that habit and stick with it for a few months and you’ll it will be with you. You’ll stay that way, and it can only get better from there. So if you’re in a really bad position right now, just know that it only takes a couple months for you to be in a much better position. It’s not gonna be solved. It takes time and work to solve the issue, but you’re going to be way better off than you were the two months prior when you weren’t doing anything at all. And you’ll feel like you’re actually accomplishing something. You’ll be much more motivated and you’ll be happier.

Absolutely. Yeah. Um, the other thing is, is, you know, if you are at that point where all of your cards are maxed out and you’re trying to pay them off, you can also do like a balance transfer card where you get that introductory rate of 0% interest for two years if you do a balance transfer. So where you take the balance from an existing credit card and you basically transfer it onto a new credit card. Um, and that can help your credit score a lot because it increases your overall credit so your usage percentage of your overall credit will go down. So if you have a card maxed out, um, like, I actually did this with my first credit card. I had a my very first credit card, had a balance or had a limit of $1000 I had it maxed out, and then I opened a balance transfer card with Chase, and they gave me a limited of $2000. And so I transferred the $1000 from the one credit card onto the $2000 card. And I had Then I was only using 33% of my total credit line. It was 50% on one card, but overall, it was only 30% of the overall credit line that I had open s O that improve my credit a lot. Um,

that’s basically just consolidating debt there. And you you can also which, if you don’t have any loans out, if you just have credit card debt looking, the other thing that can help you out, too, is taking out a debt consolidation loan Would. Basically, it’s a personal loan. Yeah, which you can just take that out for. The amount of credit card debt you have. Kill all of your credit card debt. Now you have this loan, which is gonna help you with your overall credit scored. Cut, Kresk. Workers one. All the cards are now gonna be paid off. And to your credit usage goes down. You don’t have any credit card debt. Um, and to you now have diversified your debt. You have a separate loan that is in a completely different category compared to credit cards. So now the credit bureaus look at that and say, OK, this person’s diversifying the honor of a more credit card debt. They do have alone, but they’re making all their payments. They’re not. They don’t have a late payments. So your credit score is going to significantly go up over time, over like, six months. You can go up like 50 points or something. You can go up a crazy amount.

Yeah. Yeah. And, um, the other thing with those is they usually have a much lower interest rate than the credit card interest rates. Do you? Most credit cards right now, I believe, have, like a 20 depending on the card is in the low 20 interest rate. Some of them are a lot lower. Like I know, credit unions usually have a lower interest rate than you know, the normal big banks. Um, if you have a really good credit card with a low interest rate, that’s the card that you should be using if you have to, um or using one that has points associated with it you know, if you travel a lot using a travel Roids rewards card again responsibly is great because you’re basically getting free travel or free money for money that you’re already going to spend. You know, if you put your groceries on it every month and pay that off, you know, again, you have to build the habit and use it responsibly. But it can be really, really effective and save you a lot of money in the long term. If you can build a habit and use them responsibly.

Yeah, I know. We got ah city card. The Costco like the, uh, what is it called The gold one or whatever. It’s like the highest here. It’s $120 a year for the Costco membership. We got this Citi card because you get like, 4% cash back on gas. So you basically go fill up our gas tank with the card and we pay that off every month. And we were getting enough money to I think, if you make, if you don’t make the full $120 you just have to pay 60 and they’ll cover the rest of 60 for the rest. of the membership. So as long as you get to $60 cash back on the card, you’ll pay for half of your AA membership through them. But then you also get a cash back return. You get a check at the end of the year from Costco Ah, which can definitely help out. If you’re in a tight position with back hard, you can put the money down for that card and pay some of it off. So that cost of cards really good. And I think it’s think they also It wasn’t like two or 3% on all purchases from Costco and then 1% for

pretty much, Yeah. I mean, like, there’s a lot of cards that have really good cash back rewards. It just kind of depends on what you would use those cash back rewards. Or, like I know, people that travel a lot. The Southwest card is great because you get points towards Southwest flights. Um, it really theirs. Um, nerdwallet is a really great resource. Um, I think I mentioned them in the article for like, comparing credit card. It’s like if you’re trying to open a rewards card, they’ll you will you know, ask you what your goals are. What? You know what rewards you want, and they’ll kind of match you with a card that that suits you or that that might be best for you. They also have have information on, like, consolidation loans and, um, balance transfer credit cards as well. So

since we’re on the topic of credit cards, definitely 1000% do not ever, ever, ever, ever do not ever open up a line of fucking credit for gear. Do not fucking do that. Do not finance gear. If you want those $6000 see DJs that you think are going to make you a better d j. Do not go to Sweetwater and finance them for 50 or $60 a month for two years. Don’t fucking do that. Whatever you D’oh, it’s not worth it. You’re gonna have debt. That’s now something that you have to pay off every single month. And if you’re in a situation like we’re in right now with Cove aid and you get laid off, you don’t have savings built up. Your don’t have any budget, you’re not financially responsible. You have credit cards maxed out. Well, guess now guess what? Now you have to make all your minimum payments on your cards, and you have to make that $50 payment a month towards Sweetwater. So that’s probably one of the worst things you could do is open up a line of credit just to get gear. Do not do that. It’s stupid. It’s

now irresponsible. There is good debt and bad debt, and having no debt is bad. Having a mortgage, that’s a great debt. Having a more mortgages are fantastic debt. Um, using a credit card is good. You won’t have a credit score if you don’t use your usual credit card. Like if you don’t have any credit whatsoever, it’s because you don’t have a credit card. That’s you have to have some type of credit in orderto have a credit score. Um, it’s all about using it responsibly. So you know, if you have ah, low interest credit card and you know you do want that that specific thing and you’ve been wanting it forever, Um, you know and and you know you can pay it off in three months. You can’t pay it off right now, but use an existing card that you have that has a low interest rate rather than the store cards for the day that they give you. You know that the 10% off if you open the store card, but the interest rate is 25% 30%. It’s a shitty deal,

and plus, you’re opening up a whole new line of credit that you now have to be actively using. That thing is, credit scores also account for how active you are on them, and that means spending a certain amount of pain that off for the month. If you open up one of these store cards through Sweetwater and you’re able to pay whatever gear you’re buying in three months, will you still need to buy new gear? But the thing is, you probably don’t need more gear. That’s not what’s gonna make you a good producer. That’s not what’s gonna make you a good mixing engineer. It’s not gonna make you could master it. It’s not gonna make you a good artist. Gear does not make you a good artist who is not a good idea to open up a new line of credit. Just buy new gear and you get hurt when you close lines of credit

Never, never, never closed A line of don’t close a credit card. Cut it up, Freeze it! Don’t close it. Do not just don’t use it.

So this is

a shitty car. Just don’t use it. This is it.

This is another reason why you don’t want to open up too many lines of credit because then you’re responsible for spending money on those cards. And if you have too many cards that you can’t spend enough money on, you’re gonna be fucking yourself in the long run. And if you try to close those accounts gonna fuck yourself for a year, maybe two years till you can build all those, uh, credit score points back up

regardless of what the You know what the card is. You know, not using a car doesn’t hurt you as much as closing your oldest account of the length of your credit. Impact your credit score a lot. And umm Experian has a lot of really good kind of, um and trackers and information about like this accounts for 30% of your score. This accounts were 10. You know, that kind of a thing. So taking a look at your experience report, I think, is just just looking at it. You can learn a lot from it, Um, but your length of credit does impact a lot. So, like I didn’t open my first credit card until I was 19. So my length of credit is very short compared to someone that’s 40. That’s had credit since they were 18. Um, and so that does impact your score. And there’s not really anything you can do about that. Except wait, there’s not, you know, so having a card that you the first card you open should remain open for the length of your credit. Not using it is gonna hurt your credit way less than closing it.

How how many cards is too many cards? And also how many cards is a good amount of cards?

I don’t have a great answer for that. Um, honestly, for me, personally, I think three is like the perfect amount. Um, maybe four. Just because you have one, Like I have one from our credit union that has a low interest rate. I have the chase card that I got as a balance transfer that I’m not using currently. Really, I use it every once in a while for a small thing and pay it off again just to kind of use it on a month to month basis. And then we have the city card as kind of a joint. That’s our only doing finance, really is that card, and it has a relatively low.

It’s technically not even joined. You’re just

Well, I’m unauthorized user. So it does affect your crap. Oh, it’s right. Yeah. Um so that’s another way you can build. Credit is you could be added as an authorized user. It doesn’t actually pull a credit check for you, but you could be added as an authorized user on a card of, like, a family member or a significant other, Um, and that can it will build your credit as long as you both are using it responsibly. Um, and then maybe like a rewards card, travel rewards card, something like that. But again, like you don’t want so many cards that you can’t keep track of, like what you spent on What? What? The minimum payment is on that and you know, all that kind of stuff. But having too many also does hurt your score. And and, you know, if you have diversified credit already, having four credit cards isn’t to be bad. Having eight credit cards might be bad.

It’s also good to know. I think that the that kind of magic number of three is pretty good, too. If you have those cards, because then you can kind of look at the benefits for all them or like you’re safe. Use nerdwallet. Find the cards that are best for spending money at restaurants on the hard. That’s best for spending money at gas stations or you’ll get cash back or get rid a reduced price on gas. I know Shell has a card where you get like, I think it’s like 10 or 20 cents cheaper for gas. But

the other thing. You also have to look at it as a lot of those. You know, rewards cards have annual fees, too, so if you’re not gonna use it enough to get rewards to essentially cover the annual to get enough rewards cover the annual fee. It might not be worth it,

but the point is, you’re able to say you have three cards. You can say OK, this is my card that they use for when I go to restaurants. This is the car they use for groceries. And this is the car days for gas. You’re always gonna be putting the same amount on the card every month. It’s your budget for gas, groceries or restaurants. And so then every month, you’re always paying that amount towards that card they spent on gas. Groceries. A restaurant?

Yeah. Yeah.

And you might get more points, say, get more travel points for using that card at restaurants than you would on groceries. So you would use that card at restaurants. And in a year, you have a flight paid

up. Oh, there’s there is so many people play the points game, as we call it, um, with credit cards, you know, spending the essentials on the credit card. Scuse me using the you know, the credit card that you get the most points on. Um,

you know my old roommate Laura. She was one of those. She always was, like, racking that she had pretty much all travel point cards. She was flying.

Do you fly for free? Basically for money that you

45 times at the end of the year, different areas all around the world, all with points.

Yeah, because if you play the game right and use them again, use them responsibly. I cannot stress that enough because you can totally screw yourself over if you’re not using them responsibly. And in order to play the points game, you have to have the good habits in place already. You can’t be like, Oh, I can get free flights if I spend all this money on this credit card, but you don’t actually have the money to spend. Essentially, you shouldn’t be spending anything on a credit card that you don’t have cash in your account two to pay it off or cash in your wallet. You know, if you’re really, really bad maybe doing the the cash envelope system. I’m sure a lot of people have seen that a lot of like Instagram mommy Bloggers use that system for, like, budgeting. You know, they they put cash in an envelope for whatever for certain with the groceries, and it works better for certain things. I think like groceries and going out and that kind of thing for bills. It was kind of a pain in the ass to be to go to the bank to deposit, too. Pull it out of the accounts to pay the bill, you know, So it works better for things that you’re more likely to overspend on, like going out groceries, that kind of a thing. Um, but if that’s what you need to do to get yourself in the habit of not spending more than you have, do it again. It only takes two months. You don’t have to do it for that long. Um, build the habit of only spending what you have. And then, you know, you’ve already set yourself up for starting off the habit of only spending what you have when you’re using the credit cards.

One thing about debt is the stress and, uh, psychological torture that it’ll actually put on you. This is another good reason for why you should try to avoid debt, um, and not be overloaded with that. I mean, that’s one of the biggest stress factors for me is owing money. I think that’s the same for a lot of people. Just the psychological effect out of any of you guys have ever paid off a card. But the weight that’s lifted off your shoulders from not owing money and not having debt is incredible. Immediately you’ll feel so much happier. I know a lot of kids who go into a student loan debt feel the stress and effects of that every smell day. It’s something that keeps him up at night, and it’s something that is going to keep them up at night for years for decades. So try to avoid as much as possible

when I would say don’t necessarily avoid it. But using it responsibly is the key to not being stressed about it. Knowing how to use it and having the habits to use it responsibly and correctly are is the key to avoiding stress. Avoiding it all together is not going to help you. It’s gonna hurt you.

Well, yeah, And I would add, If you cannot handle the debt, don’t take it on. If you don’t know how to use that responsibly, don’t ever take it on. Not until you talk to an accountant or you talk to a financial advisor where they can tell you what good pieces of debt you can get into that and set you up on a good goal on a good path where you can maintain it and you won’t be stressed out about it. So if you don’t know how to maintain the debt and healthy and stress freeway, don’t take it on. So, yeah, let’s get into kind of the last topic here and then we’ll kind of go over. Some were good Resource is that we’ve found over the year that will drastically help you out with getting getting your finances set up in setting yourself up for success. So what’s the What’s the third and final step towards? You know, getting good personal finances set up?

Yeah, well, we kind of touched on it a little bit already is it’s getting an emergency fund in place,

basically, just savings

savings. Yeah. Um, but there’s multiple different kinds of savings. So there’s, um, the emergency fund, which is the first kinds of savings that you should have set up. Um, emergency fund should be 3 to 6 months of living expenses. Um, if

you were saying that your bills every lt’s groceries, minimum payments for credit cards on money, was it fun money? What would that be considered? It’s mostly just a central

I mean, it depends. Honestly, it’s It’s your preference. I personally would include fund money because if you’re laid off and you don’t have any income and you know

you’re sitting around

sitting around, you’re gonna get really depressed and you’re not gonna have any motivation to go get a new job or anything like that, you know? So I personally would include fund money in that, But it is, you know, personal. You know, having three months of essentials is better than having none, you know. So, um, essentially, you want 3 to 6 months of your living expenses. Whatever your normal day to day life style is, three months is usually the minimum for someone that is like a W two employees. So, like my job, I would say three months is is probably pretty good for me. The reason it’s 3 to 6 months is or disability insurance. If you have disability insurance, that usually has a 91 day waiting period. So if you were to get disabled in like a car accident or something like that, you have to be injured and incapacity or unable to work for three months before those benefits kick in. Um So that’s why it’s the three month is kind of the starting point. Um, if you’re self employed or if you work from home, that is extended, I believe to 120 days. So that’s this. 66 months, five months, six months, You

know, for months no.

Or Okay, wait.

Yeah, four months under 20 days. 60 days is two months. Yes, Underneath these would be six

181. That’s what anyone is the waiting period on disability if you’re self employed or if you work from home because it affects you less. If you work from home and you get disabled, you know you can more than likely still work from home. Hopefully, hopefully, um, so that’s why it’s the six month in that in that range. Also, if you were getting ready to quit your day job like, say, you have a day job to fund your music career, um, you need to have six months, in my opinion, saved of your living expenses unless you have proof that your business is going to produce. If you have the history that your income is going to, your business, income is going to produce a livable, you know, amount. Then there’s a little leniency there. But in my in my opinion, I would say you need to have six months of living expensive saved before you completely quit your job. Especially if someone else is depending on you for part of their livelihood.

Now, in the this is Yeah, this is super. Do not Do not quit your fucking job to go full time without a minimum of three months. Minimum three months. But best case scenario six months because you might get four months in and go. Oh, fuck. My money is dwindling. I’m not making the money. I think you have two months to find a job. Go ask for your last job back. If you had a good relationship being say, fuck you, I’m quitting. More likely, you’ll be able to kind of hopefully get your job back or get a lower position in that job. But don’t fucking quit your job without three months. And now here’s the other thing I will say to with because I’m sure this this kind of dips into what we’re talking about with savings for business should also be putting money aside that you’re making from your business away into savings? Um, not only that, but you should also be putting money away every time. Now, if you just This is if you’re just starting out and you’re young, um, or if you’re not, if you’re three years into working on your business, but you still have shitty personal finances and bad business finances, any time you get paid for a project, you should be taking out. Look up in your state. This is for the U. S. Out anyone outside of the country it’ll be. You’ll need to look somewhere else what the tax rate is for your country or province. But if you’re in the U. S. Look up what percentage of sales tax is in your state whenever you make a sale in your business, someone buys your service by whatever money you make in your business every single month, you should be taking a percentage of that out and putting in savings for taxes. Now, what I recommend doing is per prod, doing a per project basis. If you’re a ghost producer or if you’re mixing engineer, master engineer, you’re an artist. It’s gonna look a little bit different, Um, with that you’ll probably wanted to find a c p A music C p A. And just ask them. Ask if you can just get some advice on how much you should be saving for music sales, because that number’s gonna be a little bit different compared to someone like me who’s a mixing mastering engineer where I am on per project basis. But for me, it’s at whenever I get paid for a project, I’m taking a percentage of that sale and putting it away in savings for the end of the year, because I never know if I’m gonna make enough money toward the government’s gonna come and say, OK, your business is making enough money. We’re gonna now tax you on. When that tax comes, it fucking hurts. It can range. Small business tax can range anywhere from 10 to 30%. That’s 30% of the income you make. So if you’re wanting to go full time, you need to be be accounting for taxes as well. If you’re going full time, that means you’re gonna be making more money, spending more time on the business. And if you’re not putting that money away for taxes at the end of the year. Let’s say you make $30,000. That’s a livable wage. You can get by in a small apartment and do everything you need to. D’oh. Well, if you’re now full time with that business in the government’s can come ask for 30%. That’s $10,000. You’re now making $20,000. That’s a part time job. If you don’t have that $10,000 saved up to pay the government, you’re fucked. You are completely fucked. Now again, this is why you have savings in case of these types of situations. But if you’re also accounting for your business savings as well as the tax money, you won’t have to dip into that savings. That savings is still there. You have your tax money Now, if you don’t make enough money to where you’re gonna get taxed, you now have a bonus at the end of the year for yourself

or something to build up. You know, for your business is just, you know, if something, if your business is slow one month you have enough to maintain all of your websites and your subscriptions and

that will not

you know

that’s The biggest thing, too, is as small business, especially as artists mixing engineers. Whatever you’re doing full time as a musician, you have slow months. You have months not happy. You don’t have you? You’re not guaranteed a paycheck every month or every two weeks, like you are on a normal day job. Um, And because of that, if you have savings saved up and built up and you’re smart with your money, you won’t stress out in those months where you have two months, you don’t get paid at all. And this is the other thing to, you know, make Not only should you be making a personal budget for yourself, but you should also be making a business budget. Just all the things we’ve talked about here we should be accounting for and doing for your business is well, whatever your expenses are for your business, you’ve got to make sure you budget everything in your projects that those things are gonna get paid off. So you build up enough money and half savings built up. So if you have a two month dry spell, you can pay everything and you won’t stress out. It’s okay. You’ll be fine and you’ll recognize when you’re slow. Months are I’ve definitely started to recognize Oh, these air the months I’m slow and then all of a sudden you have four months where you’re getting so meant so much fucking business. Um, and you know, a lot of this has more to do with the mixing engineers, master engineers, people who were selling sound packs. People were doing ghost production. That’s more for you. The service industry. As an artist, it looks completely different. Um, that all depends on your marketing strategies. How often you’re releasing songs. Um, how much you’re touring, whether you’re playing shows at all, All of that accounts for where you’re slow months are gonna be, um, if you’re a smaller artist, but you’re playing shows at venues, you’re busy. Months are gonna be winter seasons. Colder seasons, cause that’s club season. That’s when everyone’s going to shows in clubs and going to venues, whereas in the summer you might have slower months. If you’re younger artists cause that’s festival season, that’s when all the big festivals air going on. All the big artists are playing the big festivals. You might not necessarily be playing those shows That’s not to say there’s not gonna be club shows or venue shows in the summer, months and spring. Muns is just going to be less of them because of how many festivals there are and how many people are playing at those festivals. So bigger shows aren’t coming to your town, so you don’t have the opportunity to play an opening slot or support slot or whatever it is. So you can kind of gauge when those slow months are and when those busy months air coming if you’re playing shows. But make sure you recognize when those when those months our track each month how much traffic you’re getting on your website, how many quote you’re getting, how much money is coming in so you can recognize when it’s slow when it’s not, you can prepare for those instances.

This is exactly the kind of what I meant and what we meant when we mentioned your personal finance. How you handle your personal finance finances directly correlates to how you will handle your business finances, because if you have good habits and you have a good budget, personally, you already have that kind of base. Have it established mentality established. So, um, when you go to do the same things for your business, because business, it’s very similar. There are additional things you have to consider, like the taxes and all that kind of stuff. But the budget is essentially the same. Just replaced the names instead of groceries. It’s your website subscription instead of, you know, utilities. It’s young. Your ads instead of, um, your Netflix subscription. It’s your whatever, I don’t know,

buying tracks for playing shows.

Yeah,

because that can rack up very quickly when you’re buying tracks. I know when I had a radio show, I was spending 60 to $90 a month on tracks alone. That’s a subscription, basically knew every time I was going to be spending that amount of money so I would budget accordingly to make sure I had that money for my show. Continue that.

Yeah, so and it really does all bleed over. And if you have a business credit card, having the good credit card habits with your personal credit card is going to directly impact how you use your business credit card. Are you? You know? Yes, you should use your business account for business related expenses rather than using your personal account, because it’s easier accounting wise to track it. When you go to hire an accountant, being able hand over all of your straight business expenses separate from your personal expenses just makes everything so much easier.

This is where you should also be thinking about how your filing system is to, um, there’s a lot of things you can write off for business expenses if you’re buying stuff for courses. If you’re I think ad revenue plays into getting write offs as well, because you’re investing money into your business. If you can prove that you’re investing money into your business, then you can get write offs. This is this is one of the major reasons why Amazon is so fucking big and they continue to grow and why people don’t understand why Amazon can’t help people out or pay better wages to their employees and all these sorts of things. If you do some research and look into Amazon’s business model, their profits are so slim they’re they’re so, so small and they get so many write offs because of how much money they invest back into the business they invest in a certain amount of their money into their business. And that’s why they pay little to no taxes because a lot of the things they’re paying our write offs, it’s so there’s so much money they’re investing right back into themselves that they don’t really have to pay any taxes. And so you got to think about how you’re filing things when you buy something for your business. You should be printing that and putting in a filing system, or at least online whether that’s in Dropbox. Or I recommend putting in two places either having having one on just your desktop, um, in a file on your desk top, um, and then on Dropbox or Google Dr. Filing two things in two separate places. Or having physical and digital on a cloud server, though in case your hard drive fries and none of that stuff is missing or in case your hard drive does fry. But you have something, Um ah, in person physically that you printed out or doing dropbox is 1/3 situation is well, in case you have a catastrophic event in your house where your house burns down in your apartment, burns down and you’re you lose your all of your computer data and any physical things you have. Well, all that stuff is stored in the cloud service where you can still pull and you have all your records. But you should be putting time into funneling records and having all that information so you can take all of your business stuff, all filed in one folder. Send it to your C P and go. Here’s everything, and everything is itemized and perfectly situated, where they can quickly run through everything for you you’ll get. You’ll get a quicker answer back from U. C P. A. And we’ll be able to get you the best deduction possible because everything is filed accordingly. If you’re buying any books for education, that is all tax. Write off for education as well that you can put towards your business. So anything like that print that stuff. Violet. Have it.

Yeah, most like CPS to will do well. Like you can get free object like a free educational or, you know, oh, good. CPS will provide some education for free. You don’t necessarily have to pay for them to, like file your taxes or anything like that for them to give you just basic information on on. You know what you can and cannot write off on your own? Vs, um, you know what you should be keeping, What you need to keep records of if you do need to file taxes, all that you know, like if you have a good C p a. They should be giving you that information for free and not charging you like a retainer or anything. You know, they they should be charging you to file your taxes.

You should 100% be noting what you’re spending your personal money on on your business. That is all. You can write all of that off if you’re spending any of your personal money because it’s investment into your business. So if you don’t have any funds in your business account, you have to dip into your personal funds. That’s all write offs you should always be tracking. But that’s you know, that’s another thing we should talk about is having. You should have a separate account for your business. You should have, whether that’s a business checking count. I know a lot like if you chase me of business count if it’s inactive for 30 days, they closed the account automatically. So something like I use PayPal business just cause of how small I am and they’re invoicing system is very convenient, but that’s one of the best ones to use. It’s free, and, ah, for their whole filing system is really great. You contract everything on there and file receipts with them, and all of your invoices that you’ve sent out are on there. You can track everything very thoroughly, but you should have a separate account where your business money is being put into. And all of your subscription should be on that business card that you get from PayPal or whatever business checking account you have. And that way, you’re not using your personal debit card. You can just transfer money from your personal banking out over into your business bank account, and everything’s still just being charged through that business account.

It makes accounting much easier. Yeah, on everybody, just having everything in one place.

Um, is that pretty much it for savings? I mean,

me

and we just we talked a lot about savings in the beginning, kind of covering the most of how much you should be putting into your savings. Definitely. Try to find a savings account with, um, an interest rate. I know. I think the medium right now is around, like 1.65% but

that’s a high art. Our bank right now has a high

hard 1.75

Yeah,

I think the average is like 1.6.

It totally depends on the bank. Um, like some banks have 0.1% is considered a savings account, which is ridiculous. You should look for you. There are accounts out there that have interest rates over, but 1.5%. And that’s what you should be looking for when you’re looking for a savings again, something over 1.5 and it fluctuates all the times you might not be able to find something over that. But over the one creep over the 1% mark is what I would consider a statement down. Otherwise, it’s basically a glorified checking account.

Yeah, and that’s monthly too. So every month, however much you have in the account, it will go up by that percent, they’ll give you money in there. So if you have $1000 you have a 1% interest rate. You’re going to get $10 in there. Yeah, you’re gonna get $10 extra in there a month in that. You know, if you have $10,000

hounding into

Yes, If you have $10,000 in there with 1% interest rate, you’re going to get an extra $100.100 dollars a month in there.

Yeah, and it compounds month to month, too. So that’s that’s that was kind of the other. The only other thing about savings. And, um, the third, I guess step in starting your personal finance journey. Um, is you know, there are multiple places to save. You should have an emergency fund save so three of six months of living expenses. But there’s also, you know, like if you have kids savings for their college, um, saving for your retirement. Um, you know, saving for large expenses, that kind of thing. Those air, all additional, you know, savings pieces that aren’t related necessarily to the emergency fund. But if you don’t have an emergency fund in place, you shouldn’t be focusing on those other items because you’re not gonna be able to continue to fund them If you, you know, have an event and can’t pay your bills anymore and you don’t have, like, you should have at least some kind of emergency fund before you start, um, investing in anything. Um, because otherwise you don’t have anything to dip into. You’ll have to dip into, you know, those ah, retirement accounts that have penalties and all that kind of stuff on. Right? Right. If you

hadn’t been for that stuff, I think we can both say we highly recommend you go talkto like a financial adviser to discuss more details and those different kinds of kinds of accounts. Um, but

these air just kind of like the the three main things that you can kind of take care of on your own and start off on your own to get yourself into a good position. To where? If you when you do go talk to a financial advisor, which I think everybody should at some point in their life. Um, you’re you’re often

rather than later.

Yeah, You’re off to a much better start than then. A lot of people are so

well. This is kind of talking about this savings here. What we were discussing earlier. How successful people why they’re successful is because they save a lot of these. Compounding interest rates are the reason why you can be so successful and have so much money, because if you have that $10,000 that’s compounding every month with an extra $100 a month every $1000 you’re going to get another 10 so very quickly over two years if you have $10,000 saved up. Naturally, if you’re not putting a money into that, that can quickly go up to $20,000. And at that point, it doubles so fast.

That’s one of the key things. Uh, that’s talked about in in retirement accounts. This start saving young Start saving in your twenties, because if you wait till your thirties, you have that much more work to do because you have lost 10 years of compounding interest. And that’s just in an exponential. It’s an exponential curve. Compounding interest is an exponential curve essentially,

and we’re talking about 1% year are banked as 1.75% so get to $10,000 you’re nearly at 200. You’re almost at $200 extra a month you’re getting so when you hit that $20,000 now here, almost making $400 a month.

That’s just a traditional savings account that doesn’t include, you know, investments that usually average over a lifetime. 6% returns, you know. So there’s higher returns out there, obviously, but, um, different accounts of different return rates and compounding interest on that changes so.

But, um, I think that’s pretty much it for, like, the steps you need to take. Definitely. I mean, take all this stuff into account and really think about. It’s so so, so important to you in your livelihood, especially if you’re willing to start a family. But let’s talk about couple of things. Couple of resource. Is that really good? I know you mentioned Nerdwallet, which that’s a great resource again, if you want to check out anything we’re talking about here. All these resource is will be on the episode. Show notes at envious audio dot com slash episode 24. All the links to these websites that we’re going to be talking about, you know, nerdwallet checking to compare cards, giving advice for pretty much all of everything we’re talking about. That’ll give you advice on, um, a extra little details. They give,

um,

premature. Anything to do with finance?

Yeah. Nerdwallet is just a really good free resource toe. You know, if you are just starting out looking at all of your finances, it’s a great research. They have a lot of good sources on their um, I’m not sure if they haven’t had a good budgeting app is meant. Um, that’s a good budgeting app. Um,

good savings on to cause they’ll help you get, like, reduced fees or return fees from you for, like, electric bills and all that kind of stuff

doesn’t do that. I think so. Okay. I didn’t know that

you can put in, like your phone bill and all that stuff. I think they’ll help negotiate. Either reduced.

There’s a bunch of those kind

of

acts that otherworldly species and get you your fees back.

So, uh, cushion cushions a great one, which is through the Facebook meshing messenger app. I’m pretty sure you can just look up. Look up cushion dot Aye, aye.

They’re coming out with an app now, though. Getting rid of the Facebook message.

Yeah, I think so. But if you go to cushion dot ay, ay, you can sign up there and it’s a It’s a natural bought that goes in, negotiates with your banks and all your credit card banks, and they’ll get it. They’ll refund, um, fees for you. I know I’ve had upto like, I think so far they’ve returned over, like, $400 of fees for me, For my sister, I think it’s been like seven or $800. They’ve return fees for over the past year.

That’s a nice savings cushion. That’s a great,

well, paying off a car going off whatever card.

Well, that’s the other thing is people. I don’t want people to think that you have to do step by step by step. Here, you can do multiple things that once you know, you don’t have to pay off all of your credit cards before for you start savings. You know, doing them at the same time is best because you’re going to get to the end gold that much faster. It might not seem like it, but you know, if you are focused so hard on paying off all your debt, but you have no savings. You’re gonna end up just building that debt back up if you run into an emergency situation. Um, you know, the first step is building a budget. Figuring out what you’re spending is that kind of a thing. But after that, you you you kind of have to do things simultaneously to move forward. Uhm, you know, obviously your main focus should be on one thing versus the other. You know that? I never think. Um, but it’s not. It’s not a step by step process per se. Um, it can be done simultaneously.

Um, be a cushion. Highly Rickman. And I think the really the last one that we would highly, highly, highly recommend for, I mean, just straight budgeting and saving is simple or the thing that we the the best bank account I’ve ever had. It’s an online bank. They do have.

They’re partnered with B b v a

u S o N e a t m. That’s bbv a. You can go pull money from, um without a fee, I think. Ah, but it’s all online. No fees, no overdraft fees. Um, you nothing like that. You budget everything for expenses and goals. So your checking account. Your quote unquote checking account is actually called your spending account. So you set up all of your expenses for the month, and you set up your paydays and when those bills are due, So basically, what it will do is when you get paid, it’ll divide immediately. Divide your money out into all the expenses paying. So if you have, like a $60 credit card bill that’s due on the 28th of the month and you get paid on the 15th of the 30th you can set it so pull money out. We’ll pull half each pay period into the account you’re not allowed to touch. It doesn’t let you touch that account so you won’t spend that money. Um, and then you could do the same thing with gold. So if you have a vacation goal that you want to make in two years and you need $4000 saved up, you can. It’ll automatically tell you how much you need to save per pay period, and it’ll automatically draft that money into your goals account. Eso Everything is already budgeted for you. You just you have to do the initial budget we’re talking about here and going through everything with that spreadsheet, and then you can enter all that stuff into simple Ah, you don’t have to deposit anything in the account to, like, open. You can just open an account does come with a debit card. You do get that. But then they also have their savings goal account, which is building up your savings. You can automate how much money you want to put into your savings per month. Um, or per pay period, I think, and you can. It will automatically do that. But their interest rate right now is 1.75% which is

27 3 and

1.73 It’s really fucking that at the time that we’re talking about right now might be lower higher when you’re listening to this. But simple is one that probably the best bank account you can get for budgeting and just being good in having healthy personal finding.

I will say the one downside I realized recently is they don’t have a bill pay option. So if you like, um, I know some people, like pay their bills with the bill pay from their bank where their bank actually mail’s a check to whatever institution they’re trying to pay a bill at Simple does not have that function. So if that’s like your primary way of paying bills, you might hate it. It’s just one thing I realized recently with it,

but, um, yeah, you guys won’t check out any of those. Resource is again. Head to the show notes and visa audio dot com slash 24. I think that’s it. Marty, thank you so much for sitting down today. This was is I mean,

a lot longer than we

gave me. But I hope you guys were listening through this whole episode because I think everything we talked about is vital for you to be successful, especially for your business. If your personal finances are not in order, you’re not gonna be able to go full time. If you I mean, if you do go photo full time, you’re gonna be stressed out. It’s gonna hurt. It’s you’re going to regret it. You’re gonna hate what you’re doing. You’re gonna want to go back to a normal, steady paycheck. So it’s important to look at these things, get them in order. So that your business finances could be in order. And you could be successful. You could be happy. You want to be stressed out. Awesome. Well, thank you guys so much. I appreciate it and can’t wait for next episode.